Vladimir Putin has attacked foreign intervention in Russia, the US missile defence plan and called for an increase in domestic oil processing in a defiant final annual address to parliament before he steps down as Russian president in 2008.

ON FOREIGN INTERVENTION

Mr Putin confirmed he would be stepping down in 2008

Some want to return to the past to rob the people and the state, to plunder the natural resources and deprive our country of its political and economic independence. The financial flow from abroad is expanding to intervene in our internal affairs.

Democratising slogans are used, but the goal is the same: to gain unilateral advantages and personal benefits, to secure one's own interests. Some people are even using the most dirty techniques, trying to incite interethnic and interconfessional conflicts in our multinational, democratic country. In this regard, I urge you to quickly adopt amendments to legislation that toughen responsibility for extremist activities.

ON OIL

In 2006 Russia was the world's top oil producing country. But in the area of oil processing we are fundamentally lagging behind. The government should draw up a system of measures to stimulate an increase in the processing of raw materials within Russia.

Without infringing the interests of our foreign partners, we should nonetheless think of the development of our own processing base.

ON MISSILE DEFENCE

It is obvious that the United States' plans to deploy a missile defence system in Europe are not exclusively a Russian-American relations problem. To some extent it affects the interests of all European states, including those that are not Nato members This issue deserves, I would even say demands, to be discussed at the OSCE (Organisation for Security and Co-operation in Europe), in the framework of the organisation's military-political dimension.

It is time to fill the OSCE's activities with real content, to steer the organisation to face the problems that truly concern the peoples of Europe, rather than merely seeking fleas across the former Soviet Union.

ON HIS SUCCESSOR

The next state of the nation address will be given by another head of state ... it is premature for me to declare a political will.

ON BORIS YELTSIN

He considered a direct, open dialogue with people to be exceptionally important. He considered it necessary to present the problems and priorities of state policy for public discussion. He saw in that one of the most important tools for uniting society, tools for real democracy.

The real threat to the security of Russia and its integrity was separatism. In this respect, there was a critical lack of resources to solve the most fundamental, vital problems. But it was precisely in that period - in that difficult period - that the foundation of future changes was laid.

ON THE MILITARY

The re-equipment of units with new and modernised weapons and technology is going according to plan.

An important indicator of the state of the armed forces is the state of the social guarantee system for military personnel and their family members. By 2010, the task to give them permanent housing has to be solved unconditionally.

ON RUSSIA'S ECONOMY

Despite the social and political problems, we built a new life. As a result, the situation in the country - slowly, step by step - began to change for the better. Now, not only have we fully ended the decline of production, we have become one of the ten biggest economies in the world.

ON 2007 PARLIAMENTARY ELECTIONS

The forthcoming election to the State Duma will be based for the first time on the so-called proportional system. This means that only political parties will take part in the election.

I would stress that we have knowingly taken this, in essence revolutionary, step and have seriously democratised the electoral system. We should directly say that previous elections based on the old single-seat system, or single-seat constituencies to be exact, did not prevent influential regional structures from passing their so-called own candidates with the use of administrative resources.

I'm convinced that the new electoral procedure will not only step up the parties' influence over the formation of democratic power, but will also contribute to the growth of rivalry among them. Consequently, it will strengthen and improve the quality of the Russian political system .

ON NON-GOVERNMENTAL ORGANISATIONS

In democratic conditions, it is impossible to imagine political processes without the participation of non-governmental associations, without consideration for their views and positions.

The number of non-governmental organisations operating in this country is also growing, as is their number of voluntary members, who perform various socially important functions, and various kinds of socially important work. There are already about eight million of them in Russia. All these are real indicators of an active civil society forming in Russia.